Bitcoin Kicks Off Week Above $17,000, Market Sentiment Turns Optimistic

Bitcoin is seeing immoderate greenish during this week’s marketplace opening and seems poised to reclaim higher levels successful the abbreviated term. The fig 1 crypto by marketplace headdress experienced immoderate of its worst months successful history, but the bulls were capable to clasp the enactment astatine astir $15,500. 

Now, the macroeconomic outlook is changing and could commencement supporting further profits for risk-on assets. As of this writing, Bitcoin trades astatine $17,200 with 2% and 5% profits successful the past 24 hours and 7 days, respectively. 

BTC’s terms moving sideways connected the 4-hour chart. Source: BTCUSDT Tradingview

Bitcoin Market Is Getting Back To Normal

Data from crypto derivatives speech Deribit indicates a displacement successful marketplace sentiment. Participants are much optimistic astir Bitcoin aft the illness of the crypto speech FTX and the autumn from the grace of its co-founder and erstwhile CEO Sam Bankman-Fried. 

This lawsuit pushed Bitcoin to a caller yearly debased and backmost to its 2020 levels. As seen successful the illustration below, the BTC Open Interest Weighted Annualized Basis shows that the prices of options contracts were successful backwardation. 

In different words, options were cheaper than their underlying asset, Bitcoin, pursuing the FTX collapse. The past clip BTC saw akin backwardation was successful July 2021, during the 2nd capitulation lawsuit that triggered a 40% clang successful the crypto market. 

However, the illustration shows that successful July 2021, marketplace sentiment and backwardation were acold from their November 2022 levels. In addition, the illustration shows that the dense selling triggered by caller events is decreasing, and the crypto marketplace is normalizing. Deribit stated:

In July 21, the full curve didn’t invert arsenic the longer-dated contracts inactive traded astatine a premium. Since 8 November this year, we nevertheless spot the full curve trading beneath spot.

Source: Deribit

BTC’s Price Short-Term Rally Is More Likely

Paired with the above, Deribit claims the BTC 25 enactment skew, a metric utilized to gauge marketplace sentiment by looking astatine the request for enactment (sell) options contracts, and their implied volatility is besides connected the decline. Puts were costly during the FTX fallout but are returning to their “normal” levels. Deribit said:

A driblet successful 1 Month Skew indicates the shorter-dated retired the wealth calls are getting much costly comparative to the retired the wealth puts.

In different words, marketplace participants are buying much calls (buy) contracts. These options person a short-term expiration date. Thus, radical mightiness beryllium gearing up for a Christmas oregon end-of-the-year rally. 

As NewsBTC reported, the max symptom point, the onslaught terms astatine which a ample information of the declaration volition expire worthless, stands astatine $20,000. 

BTC Options’ Open Interest for the December 30th expiry. Source: Deribit